Bitcoin’s price trajectory is now eyeing the $58,000 mark after a recent 8% drop left long positions devastated. For the first time since mid-July, BTC has plunged below $59,000, driven by what seems to be unrelenting selling pressure.
Weekly Bitcoin Losses Approach 10%
Data from various market analysis platforms reveals that BTC/USD is experiencing sustained sell-side pressure, pushing to three-week lows. As a bleak weekend forecast looms, market analysts caution that Bitcoin bulls may face further challenges in the coming week. Keith Alan, co-founder of Material Indicators, noted in an Aug. 4 post that Bitcoin has entered the CME Gap, which can only be filled during traditional financial trading hours. The gap between the closing and opening prices on CME Group’s Bitcoin futures markets often sees the price either rise or fall to fill it after a weekend. Currently, the $58,000 level is emerging as a short-term target.
Popular trader Daan Crypto Trades pointed out that if Bitcoin trades at its current value, it will create a new CME gap. He suggested that trading would likely open in the green box, with an existing gap from last month sitting between $58,000 and $61,000. A new gap would then form between roughly $60,000 and $63,000, making for an intriguing week ahead.
Short-lived Relief Expected
Alan also predicted that the weekly close, which was set to see BTC/USD down over 8% at the time of writing, would not offer lasting relief. He anticipated that any recovery in BTC price would be short-lived, with a support test and gap fill likely in the next week. He stressed that bulls would not want to see a lower low during this period.
An accompanying chart highlighted buy and sell signals using one of Material Indicators’ proprietary trading tools. The persistent volatility in BTC prices is “guaranteed,” according to market observers.
Market Sentiment and Long Liquidations
Adding his perspective to the CME gap discussion, another popular trader, CrypNuevo, argued that a drop to $58,000 could serve as a cleansing moment for market sentiment. He noted that the range between $72,000 and $60,000 was clear in traders’ minds, and optimistic traders who bought at $60,000-$61,000 might be scared into selling at $58,000, potentially resetting the market.
Data from CoinGlass underscores the harsh reality for long BTC positions in recent days, with nearly $200 million in long liquidations since Aug. 1. BTC/USD’s dive below $60,000 has sliced through much of the buy liquidity.
Daan Crypto Trades highlighted the relentless downtrend but noted that many orders are starting to appear. He remarked that longs are being liquidated, shorts are entering, and dip buyers are coming in, ensuring volatility.
Key Support Levels to Watch
The $56,000-$60,000 range is now seen as a critical support area for Bitcoin bulls. This article does not constitute investment advice, and readers are encouraged to conduct their own research when making investment decisions.
Conclusion
As Bitcoin grapples with intense selling pressure and significant price drops, the market’s eyes are on the $58,000 CME gap. Traders and analysts are bracing for a week of heightened volatility, with crucial support levels being tested. The interplay between long liquidations, short entries, and dip buyers will likely shape Bitcoin’s near-term trajectory.
